Climate change and oil and gas production regulation: an impossible reconciliation?

Abstract

Abstract Fossil fuel combustion is undeniably the largest source of greenhouse gas emissions worldwide. In order to meet the Paris Agreement target of keeping global warming below 2°C, globally, a third of oil and half of gas reserves should remain unused from 2010 to 2050. In 2021, the International Energy Agency estimated that in the net-zero emissions scenario there is no need for fossil fuel exploration, new oil and natural gas fields beyond those already been approved for development, or new coal mines or mine extensions. While greenhouse gas emissions from the actual exploration and production activities (upstream emissions) are increasingly regulated, the emissions from the final combustion of the produces oil and gas are not taken into account when new projects are approved. This paper argues that there is a significant lack of integration between climate and energy regulation which, if not corrected, may result in challenges to achieve the global climate targets. It analyses the mechanisms for better inclusion of climate considerations at the oil and gas development approval stage. It starts with a review of international initiatives examining the lack of engagement with the climate regime and fossil fuel production. It further analyses the oil and gas development approval regime in the UK with a view to highlighting the lack of integration of climate concerns in the licensing and environmental assessment processes.